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Deubiquitinase with an ATP-independent isopeptidase activity, cleaving at the C-terminus of the ubiquitin moiety. Catalyzes its own deubiquitination. In vitro, isoform 2, but not isoform 3, shows deubiquitinating activity. Promotes plasma membrane localization of ARF6 and selectively regulates ARF6-dependent endocytic protein trafficking. Is able to initiate tumorigenesis by inducing the production of matrix metalloproteinases following NF-kappa-B activation.